TS03 Inc Trust Units TSTIF

Reality Check – Deal Will Get Approved

[FormerBanker]

There seems to be lots of folks here who are angry about management’s performance and past actions and indicating they are voting against the deal in an effort to prevent the President from getting any further payout but the reality is this deal will be approved.  Mathematically it will be very difficult to vote the deal down – here is why. 

1. Institutional shareholders will vote in favour of the deal – they will follow the recommendation of the proxy advisory firms ISS and Glass Lewis who recommend supporting the deal.  This represents approximately 30% of the stock.
2. Insiders account for another 1%
3. All shareholders who bought stock in the quarter before the deal was announced are making money – this accounts for another 10-20% of the stock and will be voted in favour of the deal.

The above alone accounts for 50% of the stock. 

Even if the majority of the stock traded since the record date is by unhappy shareholders who have voted “no” and believe the deal will not close (if you vote no you should be selling your stock in the maket, very few will take $0 vs $0.41 market price regardless of what they post here).  This at best could amount to approximately 15% of the stock (an abnormally high estimation) and will not be enough to vote the deal down. 

It is also worth noting that stock brokers and professional money managers have a fiduciary duty to act in the best interests of their clients.  Therefore, they will choose $0.43 vs $0 for their clients in all cases.  The posts here are mainly form individual investors who manage their own money and who can make the decision based on ego, personal feelings towards management or whatever.  The professional money managers and brokers have to leave their egos at the door and do what is in the best interest of their clients which is to take the offer presented as it is better than the alternative of getting zero.